A lot of staffing companies are hesitant to offer voluntary benefits to their employees. With the rising cost of health insurance premiums, employers jump to the conclusion that their employees wouldn’t be interested in additional coverage they would have to pay for. But the truth is, voluntary benefits add value to the employer. How, you ask? A good set of voluntary benefits can cost you little or nothing to offer while providing great value through cost efficiency and convenience to your employees. Voluntary benefits also aid in recruitment efforts because certain benefits, such as dental and disability, are highly valued. In addition, they help build loyalty and retention, reducing employee turnover and associated costs.
As you can see, voluntary benefits can be an effective way to attract talent to your staffing firm, while saving your bottom line. Plus, if you offer benefits on a pre-tax basis you can use the savings to cover some, if not all, of the voluntary benefit administrative expenses.
So, what exactly are voluntary benefits? A few of the traditional voluntary offerings include dental, vision, disability, critical illness, life and accident insurance. Non-traditional voluntary benefits may include group legal plans, pet insurance, financial planning, employee discount programs, educational and adoption assistance and identity theft insurance.
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So, let’s focus back on how voluntary benefits aid in recruitment efforts. Your top business challenge is likely the same as every other staffing firm – finding people to fill job orders. Unfortunately, I can’t increase the size of the labor pool, but I can show you how to be a more attractive employer to candidates using voluntary benefits.
Consider the following from various surveys of candidates and employees:
- Less than 10% of temporary workers are uninsured according to Staffing Industry Analysts. Many get their coverage through a spouse, former military, Medicaid, etc. This results in a low take up rate because a large portion of your employees don’t need health insurance and those who don’t have it are still getting coverage. Interested employees only make-up about 40% to 50% of your workforce, because the rest already have coverage through another source.
- Candidates rate health insurance as more important than a pay raise when searching for a job. In a recent study, 32% of employees said it was number one compared to 15% who said a pay raise was their top priority.
- More than 75% of candidates consider having some form of health insurance a must, even though they recognize it’s a financial burden.
- Glassdoor reports 80% of existing employees would take additional benefits over a pay raise.
- Health insurance and other benefits are less expensive for you to provide than a pay raise because benefits don’t carry the added 10% (on average) payroll increase.
- About two-thirds of workers are Millennials and Gen-Xers. These folks want benefits, and they want choices.
It’s recommend to offer at least one inexpensive medical plan, as well as dental and vision insurance, at a minimum. Internal staff can be eligible as well as contract employees. There are vendors who will make these plans available to temporary agencies with no minimum participation if they’re handling your health insurance with minimal health enrollments. Even your Minimum Essential Coverage (MEC) plan can be beefed up and made more attractive with a voluntary plan.
While costs vary, on average a typical package might look something like this:
- Skinny MEC including a hospital reimbursement (indemnity) plan: $12/week
- “MEC Plus” non-hospitalization plan with doctor visits and Rx covered: $20/week
- Package of dental, vision, accident and critical illness with any of the above: $10/week additional
You can also simplify the administration and communication if you have a good technology module called a “benefits administration system.” These systems generally make sense if you have 100 or more employees covered under a combination of your benefit plans. It includes online enrollment and transition of information to the insurance carriers. Benefit administration systems simplify bill reconciliation, changes and additions to employees’ elections and more. Most are even designed for employees to manage the plans themselves and can integrate with your payroll to automate deductions. Either way, communicate the heck out of your benefits and train your staff to market the advantages as well.
Talk to your insurance broker now before open enrollment. Make sure you work together to complete a demographic analysis of your workforce and determine what fits best for both your internal and contingent workforces. When you add it all up, voluntary benefits make a lot of sense; it may seem like a hefty change, but the savings will be worth it in the end. In the staffing industry’s hyper-competitive job market, voluntary benefits can make a world of difference!
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